District's plan hikes taxes 3.1 mills

$36.7 million Southern Lehigh budget gets preliminary OK.

The property tax in the Southern Lehigh School District would jump an additional 3.1 mills to fund a $36.7 million 2004-05 budget preliminarily approved by the school board Monday.

Adoption of the budget must occur before June 30.

Superintendent Joseph Liberati called the budget process arduous, but school directors eyeing the possibility of state-imposed public budget referendums warned future budgets could be even more painful.

The property tax, which has risen 11 mills over five years in Southern Lehigh, could go up more than 5 mills in 2005-06 as the district struggles to keep up with growing enrollment and skyrocketing health benefits and retirement costs, according to five-year budget projections presented to the board last month.

Health and retirement benefits were cited as major factors for the latest increase, which will mean an additional $251 a year in tax to a homeowner assessed at

Health insurance costs will rise 25.1 percent, a $516,000 jump, for the next school year. Contributions to the Pennsylvania State Employees Retirement System will rise 12.1 percent, or

78,000.

Retirement contributions jumped 228 percent last year as school districts around the state scrambled to meet legislative mandates to refinance the fund. District Business Manager James Snell said the costs will probably go up about 12 percent again in 2005-06.

Budget Committee Chairman Michael Eddinger praised district business manager James Snell and his colleagues around the county for holding health costs down by forcing providers Blue Cross and Highmark to compete for contracts.

Eddinger said constantly rising benefits costs could leave the district facing insurance increases that will rival contracted salary hikes in future years.

The district is also eyeing construction of a $26 million middle school for fourth-, fifth- and sixth-graders to ease crowding that is pressuring the three elementary schools and the middle school.

Administrators and school directors also warned that future budgets could include a total of more than $3 million in spending cuts over the next three years if the district is forced to meet state-imposed tax limits.

The referendum proposal is tied to property tax reform that in turn is tied to proposals that would legalize slot machines at horse tracks and other locations around the state. Part of revenue from those gambling devices would be directed to districts in exchange for property tax breaks.

School Director William Miracle, however, reminded his colleagues that nothing has been approved at the state level yet.

"There is no law, there is no referendum, there is no gaming," he said.